Binance, the largest cryptocurrency exchange in the world, has released a tool to help customers determine how much tax they need to pay on their cryptocurrency income. The tool compiles yearly tax reports by detailing users’ Binance account gains and losses. Currently, it is only accessible to users in Canada and France, but the company intends to expand into additional markets later in the year.
According to a company release, the new tool is capable of supporting up to 100,000 transactions at once. It then enables customers to generate reports with summaries of any gains or losses made on transactions done on the exchange. Binance Tax, in its present iteration, is only compatible with the Binance Wallet, the exchange’s proprietary crypto wallet. Users can employ the Binance Tax tool to file tax reports for a variety of activities, including spot trades, cryptocurrency donations, and blockchain-based fork rewards (also known as airdrops).
With the increasing popularity of cryptocurrencies, many governments have created tax regimes to profit from the sector’s massive growth in revenue. Furthermore, the tax season is almost here, and Binance’s decision to roll out the tax tool at this moment is strategic. Also, the company says that investor interest in the tax service has been growing, which contributed to the decision to launch the tool.
Due to the fact that the Binance service is still in its beta stage, the company has said that even for users in Canada and France, it does not presently cover all transactions within the Binance ecosystem.
In addition, while future updates may allow for integration with other platforms and wallets, these features are not available with the current iteration. Clients can log in to the Binance website, select “Realized Capital Gains,” select “Income Gains,” or “Transactions,” and then get the corresponding tax report.